USPS Exigent Rate Increase Stays, Orders PRC
Sure, direct mailers have economic pressures. So does the U.S. Postal Service, and allowing the 4.3 percent rate increase instituted during the Great Recession to continue through to fiscal year 2016 will allow USPS to continue its recovery and maintain “high-quality services,” the Postal Regulatory Commission ruled on Wednesday afternoon.
“The commission concludes that continuing the 4.3 percent surcharge until the postal service collects an additional $1.191 billion in contribution is reasonable,” according to the PRC filing. (Opens as a PDF)
Contacted by Target Marketing on Thursday, USPS responded on Friday.
“We appreciate that the Postal Regulatory Commission provided some additional pricing relief to the postal service,” a USPS spokeswoman says in an email to TM. “However, the recent decision does not fully restore the Postal Service for the significant mail volume and revenue losses associated with the Great Recession. Yesterday’s decision clearly demonstrates there are significant pricing constraints in the postal law that undermine the long-term financial health of the postal service, and reinforces the need for legislative reform of the postal service business model. We look forward to working with the Commission, mailers and other stakeholders to fully address the pricing needs of the postal service when it reviews the current rate system for market-dominant products in 2017.”
Via “Grayhair’s Newsletter,” Grayhair Software emailed a “Special Bulletin” on Thursday afternoon to notify its customers “the exigent surcharge may be extended through March/April 2016. While the USPS has not made any official announcements, a January 2016 market dominant increase in rates is very unlikely, while an April increase is possible — provided there is enough CPI to justify an increase.”
Grayhair’s mail experts have made correct predictions before.
In the meantime, an “Industry Alert” the American Catalog Mailers Association emailed out on Wednesday night took a calm tone.
“Bottom line to catalogers: [It] is reasonable, considering the possibilities,” states Hamilton Davison, ACMA’s president and executive director. “Expect the exigent surcharge to be in place for about eight more months.”
Related story: 2% USPS Rate Hike Approved